The biggest target: increase in expenditures from public procurement

	Strictly control expenditure and reinforce financial regulations
	The Ministry of Finance issued the Centralized procurement catalog at ministerial level
	Tender on pharmaceutical drugs procurement for health insurance

Effective management and usage in public procurement contribute to reducing regular expenditures and increasing development investment. Photo: S.T

Having the scope larger in terms of content and format, this project has been expected to be a cutting point in managing and using public assets.

“Great” saving

Sharing views on the Law project, Mr. Tran Duc Thang – Director of the Department of Public Asset Management under the Ministry of Finance said the project supplemented certain contents in the field of management and using the State owned assets such as regulations on centralized procurement; fixed expenditures for using assets, applying the investment mode “public and private partnership” in constructing buildings of administrative agencies and units self-responsible for income and expenditures; socialization of asset usage,…the measures are expected to raise efficiency in the using, saving and anti-waste of public assets.

The policy of fixing expenditure of using public cars can be shown as one example of efficiency. Although the mechanism of fixing expenditures for using public cars have been regulated in the Decision by the Prime Minister, the mechanism is not compulsory and often registered by individuals in a voluntary manner. Thus, the implementation of this mechanism has not been efficient. According to the national database of State owned assets, there are 37,637 cars (excluding cars used for national defense, public security and state owned enterprises). Of these, there are 901 cars serving high ranking officials; 22,767 cars serving common activities; 13,969 cars used for specific purposes. In the light of the law project being submitted to the National Assembly, the government plans to make the regulations compulsory to apply the mechanisms of hiring and fixing expenditures for several public assets, including cars. In this case, State owned enterprises do not have to produce estimates for procurement but reduce costs for petrol, maintenance, drivers’ salaries and assets depreciation, minimizing amounts of drivers and car managers; individuals having privileges to use public cars shall save and avoid wasting public assets.

Calculating in details, we can see the average cost paid from the State budget to operate a car is about 320 million vnd a year, including 100 million vnd for drivers’ salaries, private payment, trip allowances and accommodation costs; 90 million vnd for gasoline; 70 million vnd for car depreciation and 60 million vnd for other expenses. If the amount fixed at 20 million vnd / person/ month for using public cars serving high ranking officials at branches and centres under the provincial level, the State budget will decrease by 80 million vnd/ car/ year. If the fixed expenditure is 15 million vnd/ person/ month, the savings will mount to 40 million vnd/ car.

Similar to centralized procurement policies, summarizing the findings from the pilots in 7 localities, 4 ministries and the system of State Treasuries, 5,044 million vnd was saved in 2008. At the State Treasury, 6,809 million vnd was reduced in purchasing cars in comparison with the market prices in the period 2001 – 2007; 59,542 million vnd was cut in purchasing computer devices in the period 2006 – 2008. Therefore, the fact that staff of ministries and localities conduct centralized procurement would lead to a large amount of expenditures saved for the Budget.

Based on the actual money saved, the project set the objective of saving and reducing public procurement. Hence, putting the reality of managing and using the State owned assets into the law is very essential.

As calculated by the Ministry of Finance, the revenue collected from saving State owned assets may rise up to 120,000 billion vnd a year, increasing by 20% compared to the present time if the Law project is publicized and implemented in a strict way.

Develop a comprehensive database.

One of issues of the project drawing attention at the National Assembly is to develop and formulate a national database of State owned assets. Actually, in order to collect sufficient data of State owned assets as stipulated in the Law 2008, the Ministry of Finance has developed the national database of State owned assets under 4 categories: land, housing, cars and assets valued at 500 million vnd and above. Up to now, the database has been developed due to the statistics of 88,857 units (making up 99% of units assigned to manage and use the State owned assets). However, the national database of State owned assets has not covered all sorts of State owned assets in terms of objects and values (estimated to reflect only 5 – 10% of public assets). Thus, the provision of general information of public assets, especially financial resources is still limited.

Determination of land value is mainly based on price determination which is much lower than the market prices. This distorts the true value of public land as one of the important assets. In addition, State owned assets in project managing units, the people’s armed units, and Viet Nam agencies abroad have not been fully reflected. The databases developed by specific organizations have not been connected to the national database of State owned assets; particularly the database of land, enterprises’ assets, and the State’s reserves. Therefore, the general management efficiency is still poor.

Revenues collected from divestment mainly on social security expenditures

“The objective of the new Law is to develop a national database of State owned assets in the orientation of integration. It means that the Ministry of Finance would be the leading agency in developing such a database which is able to connect to other databases of ministries and localities. For example, the Ministry of Transportation develops themselves the database of assets in the form of transport infrastructure. Then, the Ministry of Finance would incorporate the database into its national database of State owned assets” analyzed Mr. Tran Duc Thang.

The putting of this content into the Law not only enhances legal effectiveness in development of the national database of public assets but also enables ministries and localities to be in coordination in producing the national database of public assets in a comprehensive and uniform manner in the country.

By Hong Van / Phuong Lien